GST REPRESENTATIONS ON EXEMPTIONS AND RATES
Sr. No.
Proposed Provisions
Issues and Difficulties
Suggestions
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Threshold limit for registration and of
 Inclusion of non-taxable, exempt
 Non-taxable and exempt supply
aggregate turnover:
Clause 1 of Schedule III
 Registration mandatory when
aggregate turnover exceeds Rs. 9
lacs
 Aggregate Turnover includes
exempt supplies, non-taxable
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and export supplies makes
should not be counted for
threshold exemption practically
threshold purpose
miniscule
 Almost all small businessmen,
 Looking at inflation, the
threshold exemption should be
vendors will be covered under
kept at Rs. 50 lakhs with an
GST net
optional compounding scheme
 Agriculturist having agricultural
upto Rs. 150 lakhs
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
supplies and export supplies, etc
 Aggregate turnover shall include
turnover of all branches / divisions
income of Rs. 9 lakhs or more and  Small co-operative societies or
miniscule trading / service
charitable trusts / NGO’s
supplies will also be covered
should be exonerated from
under GST net
obligation of registration and
of same entity.
 Tax payment starts from Rs. 10
lakhs onwards
 Charitable trust/ NGO’s selling
handicrafts or other such products
will also be liable to be registered if
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 Low threshold will cause
substantial hardship to small
entrepreneurs
 Substantial increase in number of
assesses (without corresponding
increase in revenue) will result in
compliance burden.
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
turnover exceeds Rs. 9 lakhs.
 Even Co-operative Societies having
turnover of Rs. 9 lakhs will be liable
to huge burden on tax
administration and will adversely
affect quality of tax
administration
to be registered
 Low threshold will impact small
co-operative societies and also
charitable trusts /NGO’s working
for social or religious cause.
2
No threshold exemption to certain
 Small assesses making inter-state
supply of goods/services of a
3
 Threshold should cover inter-
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
persons:
miniscule amount (say Rs. 1000),
state supplies also.
will also be obliged to take
Clause 5 of Schedule III
No threshold exemption to following
persons:
 Persons making inter-state supply
registration
 Person liable to RCM will be
obliged to take registration. Under
existing VAT law no RCM is
prescribed. Model GST law
 Person liable for payment under
RCM
 Person supplying non branded
goods and services through e4
 RCM applicability should be on
proposes RCM for goods which
those business entities having
may cause undue hardships to
turnover more than 1 crore.
traders
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
commerce operators
 Small artisans/craftsmen supplying  Threshold limit should apply
through E-commerce platform will
even when goods are supplied
also have to register which may
through e-commerce operator.
cause unnecessary hardship to
them and affect their business.
3
Import of service for personal use:
Section 3 (1)(b) read with section
9(3)(c):
Importation of service with or without
5
Tax on Import of service for personal
Import of service for personal use
use will cause undue hardship to
should be exempted and should
common man (non-tax payer). They
not be counted for threshold also.
will have to take registration and file
returns even though they have
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
consideration for personal use is
imported service only once in a life
considered as supply subject to some
time.
exemption limit (to be prescribed)
For instance, a student availing online
coaching services of a foreign
institute or making payment to
foreign universities for studying
abroad will get covered under the
scope of supply and will have to pay
tax.
6
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
4
Agriculture
Section 2(7) of the Act defines term
Definition of ‘agriculture’ is narrow
Activities like breeding of fish
“agriculture” as under:
and does not include:
(pisciculture) and forestry, should
“agriculture with all its grammatical
variations and cognate expressions
includes floriculture, horticulture,
sericulture, the raising of crops, grass
 Pisciculture (breeding of fish)
poultry farming, stock breeding, the
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agriculture.
 Forestry
 Dairy farming
or garden produce and also grazing,
but does not include dairy farming,
be included in the definition of
 Poultry farming
Moreover, special threshold
should be given in respect of
dairy farming, poultry farming
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
mere cutting of wood or grass,
 Stock breeding
gathering of fruit, raising manmade
forest of rearing of seedlings or plants”
and stock breeding carried out by
genuine agriculturists.
This will make above activities taxable
even though done at small level by
agriculturist himself especially when
his combined turnover from
agricultural produce and all above
activities exceeds Rs. 10 lakhs.
5
Area based exemptions / incentives:
Presently following are exempted from If provisions for exemption are not  Various tax exemptions are
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
VAT:
made or continued in GST regime:
provided to units set up in
 Inter-se sales between Special
 Many such units will become
Economic Zones, developers of
unviable resulting into closure
SEZ,
of units having overall impact
100%
EOU,
Software
Technology Parks and Electronic
on
Hardware Technology Park Units
underdeveloped and backward
subject to certain conditions.
area.
[Section 8 (3)]
 Sales made to SEZ units.
in
 Exports from SEZ will become
cost-prohibitive because of tax
burden.
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employment
specific
areas
should
also
continue under the GST law
since the units were set up in
those areas due to the tax
benefit provided.
 Supplies made by such units to
be considered as zero rated
supplies and refund of input
taxes on inward supplies be
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
 Backward area unit exemptions
granted.
 Sales effected by manufacturing
units
covered
by
Package
Scheme of Incentives (‘PSI’) and
under exemption mode are
 Capital
subsidy
under
PSI
exempt from payment of tax
should be continued under
u/s. 8(4).
GST or else a suitable provision
 Under PSI, capital subsidy is
made
available
turnover sales.
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based
of
be made to compensate the
affected industrial units.
 Exemption to distributor be
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
 Distributor
of
the
goods
manufactured by the PSI unit
enjoying ‘exemption mode’ is
allowed deduction u/s 57(2)(a)
and (b) to enable him to pay tax
only on value addition. This
ensures that the benefit of tax
exemption made available to
the
PSI
unit
retains
it’s
competitive edge.
No such provision as of date in Model
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continued under the GST Law.
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
GST law
No transition provisions for exemption
for balance period in respect of units
to whom long duration exemption
benefits are granted.
6
No specific exemption is provided in
Levy of GST on all these essential
Strong recommendation should
respect of:
services will cause a great financial
be made by Maharashtra State to
burden and hardship to common
GST council to prescribe
person.
exemptions for these services.
 Healthcare
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
 Education
 Agricultural related services
 Toll charges
 Renting of properties for
residential use
 Public transportation
7
No exemption in respect of securities
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
transactions:
Section 2(48) of SGST Act defines
Such a tax will have adverse impact
Transactions in securities should
“goods” to include securities also.
on capital and money markets.
be made non-taxable or exempt.
In absence of any exemption, sale of
securities will be liable to GST.
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
8
No exemption in respect of sale of
immovable property:
Section 2(48) of SGST Act defines
“goods” to exclude immovable
property.
Section 2(88) defines “service” to
mean anything other than goods.
This will inflict dual levy on
Corresponding amendment
transaction of Immovable property
should be made in the definition
i.e. Stamp Duty/Registration charges
of service under SGST Act.
and GST.
Immovable property (may be
unintentionally) falls in the definition
Money is excluded from
definition of “goods” as well as
“services”. Similarly immovable
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
of service.
property should be excluded from
both the definitions.
In absence of any exemption, sale of
immovable property will be liable to
GST.
9
Sale of under construction flats and
units are liable to GST:
Clause 5(b) of Schedule II of the SGST
Act deems above referred transaction
to be supply of services. It will
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There is no real difference between
Artificial distinction between
sale of under construction property
transaction of completed
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
therefore be liable to GST.
or sale of completed flats/units.
property and under construction
property should be done away
with.
In absence of any specific exemption, it Presently the flat purchasers pays 5%
will be liable to full rate of tax.
stamp duty and Rs. 30,000/registration fees. The prices of
accommodation in major cities of
The purchase of residential units /
flats (whether completed or
under-construction) should be
excluded from the levy of GST.
Maharashtra have become
unaffordable for common man.
At least, substantial exemption
should be given in respect of
The stamp duty and registration
charges is a great burden to a flat
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transaction of sale of under
GST REPRESENTATIONS ON EXEMPTIONS AND RATES
buyer. On top of this, levy of GST
construction flats / units.
would make buying of own house
impossible for common man.
10
Long term lease of land
Clause 2(1) and 2(2) of Schedule II to
Presently, long term lease of the
Long term lease of more than 29
Act deems lease of land / building
properties are treated as quasi-
years should be excluded from
(irrespective of lease tenure) to be a
conveyance and are subjected to
the deemed supply and it should
supply of service.
stamp duty at a highest rate.
be treated at par with transaction
In absence any specific exemption,
In absence of any specific exemption,
in immovable property.
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
even long term lease would be liable to there will be dual levy i.e. stamp duty
GST at full rate.
and also GST.
This will lead to enhancement of
project costs for entrepreneur. Even
residential constructions would suffer
dual tax incidence on this account
resulting into higher prices of
residential units.
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Rates:

Agricultural produce, food
grains, pulses, vegetables,
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
Not yet prescribed
fruits, milk, eggs, meat, edible
items should be NIL rated or
exempted.

All products listed in
“Schedule A” to MVAT Act,
2005 are NIL rated. Same
should be continued in GST
regime.

Essential medicines,
Ayurvedic products and life
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
saving drugs should be
excluded from tax net.

Tax rates of the items
specified in “Schedule B” and
“Schedule C” to MVAT Act,
2005 should be kept intact
(1% to 5.5%).

Comprehensive coverage and
the self-policing nature of
GST, the base for taxation
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
would increase. It is therefore
recommended that the
standard rate of GST for
other items should not be
higher than 18%. This would
curb inflationary trend in the
economy.

The standard rate of tax
should be uniform all over
India. There should neither
be band of rates nor
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GST REPRESENTATIONS ON EXEMPTIONS AND RATES
discrimination on nature of
goods (except essential goods
and services) or the place
from where the goods are
supplied.
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